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One of the ad industry's smaller, lesser-known minority agencies is making inroads with some large, high-profile marketers.

As it begins its third year, Stedman Graham & Partners, New York, is boasting an expanded client roster. The agency, which specializes in marketing to African-Americans, recently added Bristol-Myers Squibb Co., Chase Manhattan Bank and State Farm Insurance to a lineup that already included Merck & Co., J.C. Penney Co. and Taco Bell.

Exec VP-General Manager Alfred Schreiber said minority advertising is new to most of the agency's clients.


"Most of our clients have not marketed to African-Americans in the past," said Mr. Schreiber, also managing director of True North Communications' multicultural New America Strategies Group. "But as the population changes, agencies need to communicate with those audiences. It speaks to the future of the business."

Minorities now make up one in four Americans, a number expected to rise to one in three by 2005. African-Americans are currently the largest minority group, although Hispanics are the fastest-growing. Yet spending on minorities is estimated at just 1% of U.S. ad outlays.

Stedman Graham & Partners remains relatively small, with billings of about $15 million. By comparison, Chicago-based Burrell Communications Group, which also specializes in reaching African-Americans, had billings of $168 million in 1997, according to Advertising Age's Agency Report.

But Graham has access to the deep pockets and client contacts of True North, which owns a minority stake (Chicago businessman and agency President-CEO Stedman Graham owns 51% of the shop). Chase, for example, recently gave its African-American account to Graham after last year awarding its general account to True North's Foote, Cone & Belding, New York.

But Verdia Johnson, VP-managing director, said Graham doesn't exist merely to create ads targeting African-Americans.

"We don't go in as an advertising agency. We go in as a marketing company and partner," she said. "We don't have a solution in mind, but will find out a company's needs and develop a program that fits. For every client, that's something different."


Next week, for example, the agency and client Merck will travel to Detroit for the next phase of the pharmaceutical giant's first multicultural marketing campaign. The two are working together to promote the Merck Manual of Medical Information for home use, playing off an already successful integrated program started last year in Atlanta.

Graham's program includes contacting alliances and organizations to put together local community medical events featuring Dr. Gary Dennis, president of the National Medical Association, the African-American physicians association.

The program also includes radio advertising, a medium Merck didn't use for the general market. And the agency created direct-mail pieces featuring African kente-cloth patterns as a background and pictures of African-American families.

Merck executives plan to evaluate the program's results in Detroit before deciding whether to roll it out to other markets.

"Everyone has been so excited and the community has been so on-board with the program," said Pamela Barnes, advertising and promotional supervisor for Merck Publishing Group. "We're in the forefront of a whole new advertising direction

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